Peering Over the Horizon, WildBlue Co-Founder Tom Moore Sees Opportunities Beyond Launch of ViaSat-1 Satellite
The countdown hasn’t started just yet, but in five months, Carlsbad, CA-based ViaSat (NASDAQ: VSAT) will be launching its first satellite, ViaSat-1, aboard a Proton rocket from the Baikonour Cosmodrome, the Russian space launch facility in Kazakhstan.
“We’re done with the really tough testing, where you put the satellite in a thermal vacuum chamber and cycle through extreme temperatures,” says Tom Moore, a ViaSat senior vice president and CEO of WildBlue Communications who heads the company’s ViaSat-1 satellite initiative. “Now we’re just going through the last stages of testing and processing before shipping to the launch facility.”
Getting the satellite into a geo-stationary orbit centered 22,300 miles above the United States will be the crucial final maneuver in a plan that began in 2007, when ViaSat decided to build a satellite for Internet service—“the highest capacity satellite ever built by an order of magnitude.” But a successful ViaSat 1 launch would also represent a personal triumph for Moore. He has travelled full circle in returning to WildBlue Communications, the satellite-based Internet service provider in Denver, CO, that he co-founded in 1998—and which ViaSat acquired at this time last year in a cash-and-stock deal valued at $568 million.
As ViaSat CEO Mark Dankberg explained to me at the beginning of the year, ViaSat realized that acquiring WildBlue solved a host of problems the company had been pondering as part of its decision to develop its own satellite. Before that, ViaSat specialized in satellite-based communications hardware and software, including modems, radios, and ground stations used mostly by the military and some commercial satellite customers.
Recruiting Moore to join ViaSat in 2008 helped to seal the WildBlue acquisition, Dankberg told me. “We’d been talking to him about the design of a 100 gigabit-per-second satellite,” Dankberg said. “The thing he was waiting for was whether we’d actually pull the trigger on it.”
Moore told me he had helped start WildBlue with the idea of using a satellite to provide broadband Internet service to residential and small business customers living in low-density suburbs and rural areas, where the costs of connecting to conventional cable or DSL service were prohibitive. “We visualized a market that was about 20 million homes,” Moore says. “The whole idea at the time was this would be equivalent to cable modem service, with a slight premium in cost.”
(Today WildBlue says it has about 420,000 subscribers, and Moore says the total market is probably closer to 12 million homes.)
But Moore resigned as WildBlue’s CEO in 2005, due partly to lack of support from controlling shareholders that stymied his ambition to integrate more advanced broadband technologies into WildBlue’s service. “I didn’t think WildBlue was innovating as quickly as we needed to,” Moore recalls. While the company was highly profitable, Moore says WildBlue also had taken on lots of debt as it completed its WildBlue-1 satellite and gained access rights to the Telesat Anik F2 satellite and established a dealer network to provide installation and customer service throughout the 48 contiguous United States. The company was able to provide 1.5 megabytes per second downstream speeds, which was equivalent to a T-1 line to the home, Moore says, noting that WildBlue “still has the same service profile today.”
But Moore says, “The world has changed dramatically since 2005-2006, with broadband speeds into the home doubling every three years… That’s really what ViaSat-1 is all about. It’s 20 times bigger that WildBlue-1. This is in some ways the next stop in an evolution of service.”
Moore says the goal remains the same today, “To offer a median broadband service for the 20 to 25 percent of the residential market that are the hardest to serve.” But combining WildBlue’s operational experience with ViaSat’s technology and capital resources has enabled the combined companies to get much closer to realizing Moore’s vision.
“WildBlue had a great history, but we were basically out of capacity, especially in the east half of the country,” Moore says. “We were not really able to capitalize on the next generation technologies.” On the other hand, Moore says, “ViaSat had less operating experience, but they’re able to bring this great technology innovation into play.”
The combination is “definitely a more vertically integrated company,” which has become necessary because the evolving technologies and scale of satellite-based Internet service requires a service provider to be involved in all operational and technological aspects, Moore says.
Beyond the launch of ViaSat-1, which is set for mid-May, Moore says ViaSat has established a partnership with Eutelsat, the French satellite operator, to provide Internet service throughout Europe—and WildBlue is helping with network management and support systems. ViaSat also has been working on a project to provide broadband capacity throughout the Middle East and parts of Africa.
“ViaSat brings some really interesting relationships in adjacent markets,” Moore says. “WildBlue has traditionally been consumer focused. ViaSat has mobility—there’s a memorandum of understanding with JetBlue to put ViaSat technology on 200 JetBlue aircraft—as well as government and military, and enterprise…We’re hopeful that there are other potential opportunities out there.”